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Avenue Supermarts Ltd.’s Q4 was impressive.
6% same store sales growth in January-February reconfirms the (consumer) relevance of value for money positioning, which, in our view, may potentially be a stronger competitive advantage in FY21-23E.
Recovery in general merchandise and apparel was pleasing – driving gross and operating margin expansion of 120 and 170 basis points, respectively.
That said, operational short-term challenges exist as ~50% of stores are in Maharashtra and Gujarat (limited operating hours).
Notable events of FY21 are-
it added 22 new stores,
inventory days were up (plus six days)
converted two stores to e-commerce fulfilment centres,
extended DMart Ready (e-com) to general merchandise.
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